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FX Broker Payments & Rates

hi. I am still having a nightmare with FX.

  1. Is a broker account set-up as an account in QF? A sterling account, I presume.
  2. Why can’t we change the fx rate per payment so that the invoice [euro] is paid in full and the account sterling] balances?

i have wrestled with this for hours and am really quite tired of it.
Please just tell me how to set-up and run this.

Guy

You can, but for cross currency payments you have to “log payment” on the invoice rather than tagging from the bank. When you “log payment” you can set both the GBP and the foreign currency amounts and it will calculate the exchange rate.

I do this the other way around for paying my Euro suppliers by TransferWise - I have a sterling holding account in QuickFile, tag the money I send to TransferWise as a bank transfer to the holding account, their fee as money out from the holding account tagged to bank charges, and then log payment from the (purchase) invoice to set the EUR and GBP (total less their fees) amounts of the cross-currency payment to bring the holding account back to zero.

Thank you Ian - I appreciate your answer.
Logging payment in the invoice is noted, however, here’s a scenario: I make two ‘spot’ fx deals with broker at differing rates [£/euro]. Is it simplest to open a broker account in QF for each currency we use, convert from our current account to the [euro] broker account at whatever rate and then pay from there?
It all seems so messy.

You could do it like that, or if these two deals are part payments towards the same purchase (or at least, to the same supplier) then you could just log them as payments against the invoice or as prepayments to the supplier, each with the appropriate exchange rate. I guess personally I would model it in QuickFile as close as I can to the real situation - if you have a balance in Euros with the broker that you can top up with payments from GBP and then use at a later date to pay off Euro purchases with various suppliers then that feels like it should be modelled as a Euro-denominated bank account, but if the broker is just an intermediary and each payment to the broker goes straight through (in the other currency) to a single supplier, then you might not need the intermediate account if you can just log cross-currency part-payments directly to the relevant purchases.

Do your fees to the broker get billed to you in pounds or Euros, or are they hidden in the exchange rate rather than billed explicitly?

Thanks again Ian.
There are ‘no fees’ and, as the FX is a spot deal, the sterling > euro conversion is fixed at that rate at that moment and the euros sit ready to use for as long as needed. For that reason, I am leaning to the former euro-denominated account for the broker. I will have a look at that but am not sure where to add the fx rate in the transfer.

You don’t set the rate, but when you tag a bank transaction as “transfer between accounts” and the target account is a different currency from the source one, then as I understand it you will be prompted to specify the amount in the other currency and it will calculate the rate based on that.

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